It’s a challenging market, but relocation companies are rising to the occasion to get talent moving.
By Debbie Bolla
Inflation, housing prices, and a potential recession are major market influencers for both organizations and employees alike when it comes to mobility. But recent research from the 55th annual Atlas Corporate Relocation Survey shows the industry is holding strong. When compared to 2021, 60% of respondents report having plans to increase the number of relocated employees in 2022.
“With the pandemic primarily behind us, we’ve seen a war for talent and a significant rebound in volume despite some of the new challenges of inflation and housing prices,” says John Fernandez, EVP of Global Mobility Solutions (GMS). “Companies are struggling to find the talent.” Relocation continues to offer attractive opportunities to employees, including professional development and career growth.
Here, experts analyze the market challenges and offer some strategies to get the most from mobility in the current climate.
TREND 1: Overcoming inflation, supply chain demands and housing prices.
Several pressing market issues are encouraging organizations to reduce overall spend where they can without sacrificing quality of experience.
“Cost containment is a sensitive topic for many employers. However, in the current labor market they also understand that offering a competitive relocation policy is crucial to attract and retain top talent,” explains Darci Watkins, account management director, for Corporate Relocation International (CRI). “Many companies are working to contain costs by offering a flexible benefits package such as a core/flex program. By utilizing a core/flex program, you are able to provide the most crucial parts of a move to your new or existing employee while also being flexible to provide funds towards other benefits they might need.”
Fernandez says companies should consider pre-decision services because they provide additional, often much-needed information to help improve the transferee experience while reducing overall spend by avoiding unsuccessful relocations.
Fernandez’s colleague SVP of GMS Sam Hoey agrees. “Given the challenges today, pre-decision is absolutely critical. Not only do candidates need to have insight into what they are agreeing to upfront, but families desire to be involved and engaged in this decision early on,” she explains.
Hoey says that pre-decision policies can help organizations by driving down the number of days for acceptance and minimizing exceptions. Once a move is confirmed, Hoey recommends that organizations source multiple bids for each service in order to accrue savings and work with the most competitive supplier for each relocation benefit delivered.
TREND 2: Navigating international relocation and the current global conflict.
HR leaders are leveraging relocation in order to ensure the stability of their workforce. “We have seen many organizations with employees in Ukraine quickly mobilize to offer support to move their employees and families,” says Michele Brescia, CEO of ARC Relocation. “We have seen clients with Russian employees, in Russia, relocate those employees out to ‘neutral’ countries. These relocations were done in anticipation of sanctions and embargoes, making doing business in Russia with Russian employees difficult and or impossible.”
Fernandez of GMS agrees that international relocation volume has rebounded, but with a shift in purpose. “Clients are moving people globally to redeploy resources out of harms way into more stable environments,” he says.
Safety is of the utmost concern right now. “The global conflict has not only impacted employers with employees in the affected locations, but is generally raising the focus on duty of care,” says Mark Woelfel, CRP, SVP of Global Client Solutions for CapRelo. “Companies are ensuring they are able to identify where their employees are at all times to ensure they are safe and receive the support they need should situations arise in the future.”
TREND 3: Understanding the relocation benefits that are the most effective right now.
Many of these challenges are shifting the services that are most beneficial to transferees now compared to the past.
Household goods management. “While relocating impacts many facets of a family’s life, we find the household goods transportation to be one of the most important pieces of a move. Moving is extremely stressful and a family seeing their lives being loaded on to a truck is no exception,” says Watkins of CRI. “Ensuring that the goods are packed well, loaded with care and transported safely is one of the most vital pieces of a move.”
Woelfel recommends covering the full cost of household goods shipping versus providing a lump sum to help alleviate one of the biggest concerns employees have when relocating.
Flexibility. Hoey says with such a hot real estate market, organizations need to lean on flexibility in order to cope with the limited capacity of van lines for moving and the decreased number of temporary housing providers. “In the end, it is critical that clients remain flexible with start dates, provide exceptions for temporary housing, and understand the increased cost of relocation,” she says.
A variety of financial reimbursements. Today’s challenges are forcing organizations to take several different approaches with their relocation benefits, these experts report, including adding in cost-of-living differentials, increasing lump sum calculations, and adding a sliding scale to their policies.
“The cost of materials has skyrocketed due to lack of availability and supply chain delays, coupled with increased fuel costs for household goods shippers,” says Brescia. “Companies are getting creative in helping their employees with unique loan programs, increased budgets for shipping of goods, and additional cash allowances to help offset some of the inflation costs around costs of goods.”
TREND 4: Planning now for future challenges.
While some transferees are benefiting from the inflated housing market with profits from home sales, some wonder what will happen when the market evens out. “Employees who bought houses at market high prices may be in a negative equity position and therefore will need support to get out from under their home in their next move,” says Brescia. “While the anticipated flattening, or reduction in home prices, is not expected to be as drastic as seen in the 2007/2008 timeframe, relocation management companies are surfacing discussions with their clients again regarding support for loss on sale benefits.”
Brescia’s colleague Bill Mulholland, owner of ARC Relocation, agrees that preparing for what’s ahead is critical today. “Now that the world is ‘getting back to normal,’ we are seeing clients ask for ‘disaster policies.’ These polices are prepared in advance, and ready to deploy if and when the next disaster comes,” he explains. “COVID-19 taught us that the world can and will change, and we need to be prepared when it does.”